Anand Rathi recommends subscribing to Denta Water and Infra Solutions Ltd’s IPO for long-term gains, citing strong growth potential and a favorable valuation. The company specializes in water engineering and infrastructure projects across India, with significant involvement in government water management initiatives.
Anand Rathi, a leading research firm, has recommended subscribing to the IPO of Denta Water and Infra Solutions Ltd., emphasizing its strong growth potential and long-term investment opportunities. In its latest research report, the firm assigns a “Subscribe-Long Term” rating to the IPO, which opens for subscription on January 22, 2025.
Established in 2016, Denta Water and Infra Solutions Ltd., known as “Denta Water,” has emerged as a prominent player in the water engineering, procurement, and construction (EPC) sector in India. The company specializes in addressing the growing demand for water management solutions, focusing on infrastructure projects like groundwater recharge using recycled water, lift irrigation systems, and water treatment for various regions in Karnataka. Their significant involvement in the “Jal Jeevan Mission” by the Government of India showcases their commitment to improving water availability and quality across the country.
Denta Water has completed several notable projects, such as the Byrapura and Hiremagaluru LIS Project, and contributed to Bengaluru’s rise as the second-largest city in the world by treated wastewater. The company is also actively working on multiple lift irrigation systems across various villages in Karnataka, enhancing the region’s agricultural and water supply infrastructure.
Valuation and Financial Outlook
As per the IPO documents, Denta Water has set the price band for the IPO between ₹279 and ₹294 per share. At the upper price band, the company is valued at a P/E ratio of 13.14x and an EV/EBITDA of 9.13x, with a market capitalization of ₹7,849 million post-issue. With a strong return on net worth of 36.36%, the IPO appears to be fairly priced, according to Anand Rathi’s research report.
Given Denta Water’s robust project pipeline and pivotal role in India’s water management initiatives, Anand Rathi recommends subscribing to the IPO for long-term gains.
IPO Details
- Subscription Opening Date: January 22, 2025
- Subscription Closing Date: January 24, 2025
- Price Band: ₹279 to ₹294 per share
- Market Capitalization Post-Issue: ₹7,849 million
Investors looking to capitalize on India’s growing infrastructure and water management sector may find this IPO a promising opportunity.
